2011 Annual Report - Italcementi Group

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With regard to financing for subsidiaries, the Group may also arrange facilities in a currency other than that of the loan to the subsidiary. Group policy is to hedge exposure whenever the market makes this possible. Net exposure of each entity is determined on the basis of expected net operating cash flows over one to two years and financing denominated in currencies other than the local currency. The Group hedges exposure to currency risk with forward currency purchase and sale contracts, currency swaps that translate loans and borrowings generally denominated in euro at inception into foreign currency, as well as options. These hedges are arranged with leading banks. The impact of foreign currency translation on subsidiaries’ equity is recorded in a separate equity caption. 22.5.1 Exposure to currency risk Consolidated net exposure by currency of financial assets and liabilities denominated in currencies other than the local currency is illustrated below: (in millions of euro) Euro (*) USD (*) Other (*) Financial assets (°) 3.1 689.5 9.8 Financial liabilities (°) (27.8) (39.5) (97.8) Derivatives - (566.7) 89.2 Net exposure (24.7) 83.3 1.2 (*) assets and liabilities are expressed at nominal value in euro when the local currency is not euro (°) excluding trade payables and receivables Foreign currency exposure refers mainly to the US dollar, the Thai baht, the Moroccan dirham, the Egyptian pound and the Indian rupee. No hedging is set up on net investments in these subsidiaries. At December 31, 2011, a 1% change in the exchange rate with the euro, in cases where the local currency is not euro, would have had an impact of +35.6 million euro on equity, of which +8.3 million euro on noncontrolling interests. At December 31, 2011, a 10% rise in the US dollar would have an impact on exchange-rate derivatives in portfolio of +9.9 million euro on equity and -39.3 million euro on profit before tax. A 10% decrease in the US dollar would have an impact on exchange-rate derivatives in portfolio of -9.9 million euro on equity and +39.3 million euro on profit before tax. 120
2011 Annual Report Presentation 4 General information 15 Annual Report Consolidated Annual Report Directors’ report 28 Extraordinary session Italcementi S.p.A. Annual Report Consolidated financial statements 63 22.5.2 Currency risk hedges Currency risk hedges stated at the closing rates are illustrated below: (in millions of euro) Forward purchases Cash flow hedges December 31, 2011 December 31, 2010 US dollars 98.9 35.1 Others 0.4 - Fair value hedges US dollars 6.4 41.8 Others 100.7 40.1 Trading US dollars - Others - Total 206.4 117.0 Forward sales Fair value hedges US dollars 489.4 500.2 Others 11.5 10.9 Trading US dollars 2.8 1.3 Total 503.7 512.4 Options Cash flow hedges US dollars 0.0 31.7 Fair value hedges US dollars - - Trading US dollars - 8.1 Total 0.0 39.8 Cross currency swaps Fair value hedges US dollars 103.2 100.7 Total 103.2 100.7 TOTAL 813.3 769.9 All currency risk hedges expire within 12 months. 22.6 Management of commodity risk CO 2 The Group’s European subsidiaries are exposed to market fluctuations on CO 2 emission rights prices, in connection with their surplus or deficit on the quotas allocated by their respective national governments. Trades on emission rights markets are transacted by the parent, Italcementi S.p.A., which since 2010 has also operated on behalf of the Group’s other European subsidiaries under an agency basis. From 2008 to 2011, the Group transacted forward EUA-CER swaps (forward EUA sales and forward CER purchases) distributed in the period 2009-2013, to diversify and optimize its CO 2 emission rights portfolio. Furthermore, in 2010 and 2011, the Group arranged price risk hedges with respect to the sales of surplus emission rights planned in the fourth quarter of 2010 for 2011 and 2012. 121 www.italcementigroup.com
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2011 Annual Report
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2011 Annual Report Italcementi S.p.
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The Group has decided to take a fur
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2011 Annual Report Presentation Ita
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2011 Annual Report Presentation 4 G
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Directors’ report Following the a
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The Calcestruzzi group returned to
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Financial performance in 2011 Key c
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In cement and clinker, performance
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Revenue and operating performance C
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The loss relating to continuing ope
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Net debt breakdown (in millions of
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4. Implementation of defined mitiga
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Financial disclosure risks The main
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the negative trend in sales volumes
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Ready mixed concrete sales volumes
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ASIA Thailand India Others (1) Tot
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70% by Fotowatio Italy, a subsidiar
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During the year Italcementi S.p.A.
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Raw materials and alternative fuels
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Engineering, technical assistance,
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After a revenue decline in 2009 and
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Outlook The markets on which the Gr
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Financial statements Statement of f
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Statement of comprehensive income N
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Statement of cash flows Notes 2011
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Page 96 and 97: As in 2010, for the CGUs in the EU
Page 98 and 99: Sensitivity analysis With reference
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Page 104 and 105: Net liabilities determined on the b
Page 106 and 107: The table below sets out key data f
Page 108 and 109: of the favorable ruling obtained in
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Page 112 and 113: No drawings had been made on the sy
Page 114 and 115: As a result of the Moody’s rating
Page 116 and 117: At December 31, 2011, lines of cred
Page 118 and 119: 22.3.1 Fair value of derivatives Th
Page 120 and 121: 22.4.1 Interest-rate risk hedging T
Page 124 and 125: In 2011, in view of the surplus acc
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Page 128 and 129: 28. Other operating income (expense
Page 130 and 131: The reconciliation between the tax
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Page 140 and 141: Annex 1 The following table has bee
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Page 152 and 153: Directors’ report Any changes in
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Page 156 and 157: Statement of financial position, ca
Page 158 and 159: Dealings with subsidiaries, joint v
Page 160 and 161: Risks and uncertainties Italcementi
Page 162 and 163: Ratings risks The Group’s ability
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Page 168 and 169: INFORMATION ON OWNERSHIP STRUCTURE
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- Selection of priority risks and d
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) implementing the guidelines defin
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A) ORGANIZATIONAL STRUCTURE Board o
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No limits to re-eligibility of dire
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* Mittel S.p.A. - Director Pierfran
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The Code provides for the Board of
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Lastly, the Board of Directors, in
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) a brief resume on the personal an
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) evaluate the proposals made by ex
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time to express their point of view
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In addition, the Chief Executive Of
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During 2011 the Internal control co
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TABLE 1 STRUCTURE OF THE BOARD OF D
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to be noted that CONSOB, the Italia
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* indicates the responsibilities, p
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consolidated financial statements.
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to apportion the profit for the yea
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Department of Human Resources and O
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A) VARIABLE COMPONENTS Under the Po
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This plan aims at: - tying the over
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The variable components are aligned
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With reference to the other offices
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The Board of Directors may also gra
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) Plan Management The corporate bod
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g) Any Support for the Plan by the
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position of the role of each benefi
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2) With respect to the stock option
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Name, surname Position Period durin
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Yves René Nanot Marco Piccinini At
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Monetary Incentive Plans in Favor o
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Participation of Governing and Supe
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3) Term of the authorization. The a
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specifically, with laws and regulat
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Each section shall list in progress
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Financial statements Statement of f
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Statement of comprehensive income (
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Statement of cash flows (euro) Note
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Notes The Italcementi S.p.A. financ
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1.2. Accounting policies and basis
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1.7. Property, plant and equipment
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1.13. Inventories Inventories are m
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Past service cost Changes in liabil
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Interest income Interest income is
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2.1 Investment property Investment
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The list of investments in subsidia
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Current assets 6. Inventories (in t
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Equity 12. Share capital At Decembe
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Dividends paid Dividends approved i
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18. Deferred tax assets and deferre
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19. Net debt An itemized correlatio
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Main bank loans and drawn and avail
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At December 31, 2011, the average m
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19.3.1 Fair value of derivatives Th
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19.4.1 Interest-rate risk hedging T
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ELECTRICITY In 2011, Italcementi S.
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Income statement 23. Revenue Revenu
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Stock options The company has set u
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30. Finance income (costs), exchang
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Breakdown of receivables and payabl
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Commitments with related parties (i
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(Breakdown of revenue and costs wit
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(Breakdown of revenue and costs wit
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Impact of transactions with related
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34. Audit fees Pursuant to the CONS
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Annex 1 Highlights from the most re
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Report of the Board of Statutory Au
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On the other hand, the absence of a
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Report of the Board of Directors Pr
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Current text ordinary and/or saving
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Current text In each list, the name
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Current text If there are no lists,
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Current text means of another perso
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Current text If a subject connected
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The proposed amendments do not gran
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• operate, in compliance with cur
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Corporate bodies resulting from the
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2011 Annual Report - Italcementi Group

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